Alison Thewliss: I welcome the moves the Government have made on this Bill. It is important that they have done so, but they could still go much further.
I pay tribute to the work of the right hon. Member for Barking (Dame Margaret Hodge) on the all-party parliamentary group for whistleblowing, and to the organisations in this sector that do so much to bring light to what can be a very complex and detailed issue.
The Minister talks about the UK having a reputation for allowing legitimate businesses to thrive, but we are here this evening to challenge the other reputation that has built up over the years. The UK has now become a hub for dirty money, which is funnelled through the UK’s financial system by an army of enablers. This Bill is an opportunity to dam that flow and to stop this dirty money, but as the excellent “Catch me if you can: Gaps in the Register of Overseas Entities” report, published by the London School of Economics and CAGE Warwick, says,
“there is no point building a dam halfway across a river.”
Without closing the loopholes and the gaps, that is what this Government are doing.
The Minister has promised consultations and further things to come in the future. It is fine to dangle these things before us, but we all know that we are heading towards an election and the Government cannot promise to deliver on any of the consultations he hopes to bring forward. Whatever happens, there will be an election. This House is almost out of time, and we should take the opportunity tonight to do this Bill right.
I will run through the Lords amendments, given the time constraints you mentioned, Mr Deputy Speaker. The Lords amendment on nominee shareholders was  tabled by Lord Vaux, and as other Members have said, there is an awful lot more we could do on that. It is not enough for the Government just to say, as they did in their letter to Members, that such a measure would most likely be ignored by illegitimate actors and would be difficult to enforce. That is not much of a reason not to legislate and not to try. There is a real issue with how complex structures have been brought about, and the Government need to grab hold of it. This Bill is an opportunity to close a loophole before it is further exploited.
Enforcement is a big part of this, and the Government do not enforce the current rules. Saying a measure would be difficult to enforce when they are not enforcing the rules to begin with does not give us great confidence. Between 2012 and 2022 only three fines were issued for false filing to Companies House. As of October 2022, only one fine of £210 has been issued for not filing the person with significant control of a Scottish limited partnership. If the Government do not enforce the rules they have brought forward, they cannot really ask for more rules. They need to get real about enforcement. They need to make sure the laws we pass this evening are effective.
Updates to the register of overseas entities are a significant gap in the system. As others have said, updates can take almost an entire year, in which time other things could happen. Event-driven updates would hold companies to account. If we think about it, there will be paperwork when companies make any change, so they might as well do the update at the same time. That would be logical.
Lords amendment 117 in the name of Lord Agnew, on the transparency of trust data on the register of overseas entities, makes a critical point. We must deal with trusts without further delay, without further consultation and without kicking the can further down the road. Here is the opportunity to do that. As Transparency International and the BBC showed in February, trusts are being used to hide the ownership of thousands of overseas entities under the current regime. They estimate that more than 7,000 overseas entities on the register, about a quarter of the total, are hiding the ownership of roughly 20,000 properties. Why would the Minister not want to close that loophole? Why would he not want to improve this system right now?
It is not as though the Government were not warned on this. They are talking about consulting and doing more on it, but they were warned about this when we had the Joint Select Committee on the draft Registration of Overseas Entities Bill. In March 2019, Professor Jonathan Fisher KC said:
“If I was asked to advise, on the face of the draft legislation, the first thing I would say is, ‘Have you thought about setting up a trust?’”.
He went on to say:
“I might say to someone, ‘If you really want to do this Technicolor, why don’t you have an offshore company and have the shares of the company put in trust, and when you set that trust up, why don’t you think about setting it up as a discretionary trust?” If it is a discretionary trust, the beneficiary does not rank as a beneficiary in law; all they have in law is the right to be considered by the trustee when capital income is distributed.”
So all kinds of things were already identified and very clear to the Government, having been highlighted in evidence, and they could have put these pieces of evidence  into this Bill to make sure that we are closing the loopholes now, rather than allowing this to spiral yet further.
It is also very evident that this database needs to be accessible to the widest possible group of people, because the law enforcement, particularly under this Government, does not have the money, expertise or time to go into this in significant detail.
Let me highlight some of the scale of the issue. We owe a great debt of gratitude to Graham Barrow, as a researcher into these things, in his own time, as a Companies House geek. He says that the use of brass plaque addresses for company incorporations has increased since lockdown. He has done an analysis of two main addresses being used. In Shelton Street, between 2018 and 2022, the number of incorporations at the one brass plaque address grew by 340%, from 6,200 to 27,350. Similarly, the incorporations in Wenlock Road also grew significantly, by 40%. Those are just two addresses, and the numbers are increasingly significantly. That is due to the loopholes that the Government have allowed and the corporate structures that currently exist.
We sought further amendments to tighten this and prevent these brass plaque addresses from being used for hundreds and thousands of companies. There is certainly more the Government could be doing to ensure that trusts do not fall down on this point; allowing people to register trusts in a similar way will result in the same issues.